Question: Rossi Corporation is considering purchasing a machine that would cost $454,140 and have a useful life of 8 years. The machine would reduce cash operating

Rossi Corporation is considering purchasing a machine that would cost $454,140 and have a useful life of 8 years. The machine would reduce cash operating costs by $84,100 per year. The machine would have a salvage value of $107,130 at the end of the project. (Ignore income taxes.)

Required:

a, Compute the payback period for the machine. (Round your answer to 2 decimal places.)

PAYBACK PERIOD _______years

b.Compute the simple rate of return for the machine. (Round your intermediate answers to nearest whole dollar and your final answer to 2 decimal places.)

SIMPLE RATE OF RETURN ______%

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